Growth in Wage Rates Continues

Figures
released today from Statistics New Zealand's Labour Cost
Index (LCI) and Quarterly Employment Survey (QES) show
evidence of further wage growth in the September 2001
quarter.

Salary and wage rates (including overtime),
as measured by the LCI, increased by 0.6 per cent in
the September 2001 quarter, following increases of 0.4
per cent in the June 2001 quarter and 0.5 per cent in the
March 2001 quarter.

On an annual basis, salary and wage
rates (including overtime) were 2.0 per cent higher in
the September 2001 quarter than in the September 2000
quarter.

LCI private sector salary and ordinary time wage
rates rose by 0.5 per cent in the September 2001 quarter
and are now 2.0 per cent higher than a year earlier. This
is the highest annual increase since the December 1997
quarter when an increase of 2.2 per cent was recorded.
Forty-nine per cent of private sector ordinary time pay
rates increased from the September 2000 quarter, which is
the highest proportion in more than three years. Of the
private sector ordinary time pay rates that rose from the
September 2000 quarter to the September 2001 quarter, the
average annual increase was 4.2 per cent (the highest level
for over three years).

LCI public sector salary and
ordinary time wage rates rose by 0.6 per cent in the
September 2001 quarter. This follows an increase of 0.3 per
cent in the June 2001 quarter. On an annual basis public
sector salary and ordinary time wage rates were 1.9 per
cent higher than in the September 2000 quarter.

Survey
respondents reported that one in three increases in
ordinary time pay rates during the past year was to match
market rates, retain staff or attract staff. However, three
in five pay rate increases of more than 5 per cent were for
these reasons, compared with one in five for increases of up
to 2 per cent. Annual increases of more than 5 per cent
have become more common. One in 10 pay rates increased
by this amount in the year to September 2001, the highest
proportion in over three years.

The LCI measures changes
in salary and wage rates for a fixed quantity and quality
of labour input. By comparison, QES average earnings
statistics reflect not only changes in pay rates, but
also compositional and other changes in the
workforce.

Results from the August 2001 QES show little
movement in employment, with full-time equivalent employees
(FTEs) falling by 0.5 per cent in the August 2001 quarter.
Seasonally adjusted total paid hours and gross earnings
increased by 0.3 per cent and 1.0 per cent
respectively. Annually, seasonally adjusted total paid
hours increased by 2.7 per cent, and seasonally adjusted
gross earnings by 6.2 per cent.

Average total hourly
earnings, as measured by the QES, show an upward trend as
in recent quarters. For the August 2001 quarter, average
total hourly earnings increased by 1.1 per cent to
$18.48. This brings the annual movement in average total
hourly earnings to 3.4 per cent in the year to August 2001.
An annual movement of this magnitude has not been seen since
August 1997, when it was 3.7 per cent.

For the August
2001 quarter, QES private sector average ordinary time
hourly earnings were $17.38, a quarterly increase of 0.8
per cent. In the year to August 2001, private sector
average ordinary time hourly earnings increased by 3.4 per
cent.

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